The Saccharomyces cerevisiae PAH1-encoded phosphatidate (PA) phosphatase, which catalyzes the Mg2+-dependent dephosphorylation of PA to produce diacylglycerol, is one of the most highly regulated enzymes in lipid metabolism. The enzyme controls whether cells utilize PA to produce membrane phospholipids or the major storage lipid triacylglycerol. PA levels, which are regulated by the enzyme reaction, also control the expression of UASINO-containing phospholipid synthesis genes via the Henry (Opi1/Ino2-Ino4) regulatory circuit. Pah1 function is largely controlled by its cellular location, which is mediated by phosphorylation and dephosphorylation. Multiple phosphorylations sequester Pah1 in the cytosol and protect it from 20S proteasome-mediated degradation. The endoplasmic reticulum-associated Nem1-Spo7 phosphatase complex recruits and dephosphorylates Pah1 allowing the enzyme to associate with and dephosphorylate its membrane-bound substrate PA. Pah1 contains domains/regions that include the N-LIP and haloacid dehalogenase-like catalytic domains, N-terminal amphipathic helix for membrane binding, C-terminal acidic tail for Nem1-Spo7 interaction, and a conserved tryptophan within the WRDPLVDID domain required for enzyme function. Through bioinformatics, molecular genetics, and biochemical approaches, we identified a novel RP (regulation of phosphorylation) domain that regulates the phosphorylation state of Pah1. We showed that the ΔRP mutation results in a 57% reduction in the endogenous phosphorylation of the enzyme (primarily at Ser-511, Ser-602, and Ser-773/Ser-774), an increase in membrane association and PA phosphatase activity, but reduced cellular abundance. This work not only identifies a novel regulatory domain within Pah1 but emphasizes the importance of the phosphorylation-based regulation of Pah1 abundance, location, and function in yeast lipid synthesis.